Green Deal: now the details emerge

Published:  13 June, 2012

LONDON: The Government announced secondary legislation yesterday that it said will enable the energy-efficiency market to bring the Green Deal into operation. This comes after the Government received 600 responses to its original Green Deal and Energy Company Obligation (ECO) consultation document.

Some 45 technologies and energy-efficiency measures have also now been confirmed as qualifying for Green Deal finance, with 15 new measures that have now been included as a result of the consultation. These include pipework insulation, radiant heating, water source heat pumps, hot water taps, showers, and heating, ventilation and air-conditioning controls.

Due to be introduced in October, the Green Deal will enable eligible homeowners to access the necessary financial loans needed to install energy-efficiency measures in their home. The savings subsequently made on fuel and utility bills will then be used to pay back the initial loan. The 'Golden Rule' is intended to ensure that homeowners will not pay more in loan repayments than they save on their household bills.

The secondary legislative framework announced yesterday is the next step to ensuring the Green Deal is up and running on time in October, ensuring what the government said was "support worth around £1.3bn a year to deliver energy-efficiency and heating measures [and] to help tackle fuel poverty and climate change".

Along with this framework, government has also announced measures to strengthen consumer protection, reduce industry burdens, and implement the Energy Company Obligation (ECO).

The ECO, a financial subsidy from energy suppliers, will provide extra help for those households most in need and for properties that are harder to upgrade. What the government described as "an increased focus on poorer areas" is claimed to see an extra 100 000 households in low income areas benefiting from the Green Deal each year, compared to DECC's original proposals, bringing the total number of low income households and those in low income areas assisted to around 230 000 a year.

The Government said this will ensure the market has the opportunity to build over the next 18 months, meeting its ambitions for a national energy-efficiency retrofit in the next decade and beyond.

It claims the Green Deal will support up to 60,000 jobs in the insulation sector alone, up from around 26 000 today.

Energy & Climate Change Secretary, Edward Davey, said: "We have listened very carefully to what industry, consumer groups, and other organisations have told us. Broad support for a managed, tested and careful introduction of the Green Deal fits with our objective to provide an excellent customer experience from day one and a market where a range of new players can readily participate.

"I am determined to make sure that, in addition to creating huge opportunities for Green Deal providers and businesses along with thousands of new jobs, this new market in energy efficiency will deliver the very best deal for consumers.

The Green Deal framework will be built on sound foundations, starting with assessors, installers and Green Deal Providers to ensure they are ready to start work in October.

“From August this year accredited certification bodies can submit applications to register with the Green Deal Registration and Oversight Body, and will then be able to register assessors and installers as 'Green Deal Approved'.

"Similarly, potential Green Deal Providers will be also able to apply for approval. At the same time, new systems introduced by energy suppliers for the collection of the Green Deal charge will be robustly tested. This will ensure that preparations can be made ready for the next step: the signing of the first Green Deal plans in January 2013, from where the market for the Green Deal will continue to grow."

Some of the key changes to the original proposals include improved consumer protections such as restrictions on 'cold calling', and new rules requiring Green Deal Assessors to declare any commission they might be receiving for carrying out an assessment and any ties to Green Deal Providers.

A change to the warranties proposal eases requirements on businesses to hold warranties for the length of a Green Deal Plan while maintaining robust minimum standards of protection for consumers, including 25-year warranties in the case of wall insulation.

Improvements for behind-the-scenes operations are said to make it easier for energy companies administering the Green Deal charging to deliver a smoother customer experience.

Changes have also been made to the ECO to include allow more hard-to-treat cavity walls to qualify for support, and to provide specific support for low income and rural areas. An estimated technical potential of around 2.8 million hard-to-treat cavity wall properties will now be eligible under the ECO.

The Government has also confirmed it will introduce the Green Deal through supporting a responsible and controlled approach with full national systems testing. This is to ensure the market has the opportunity to build over the next 18 months, meeting government ambitions for a national energy efficiency retrofit across the next decade and beyond.

Ofgem has also now been officially appointed as the administrator of the ECO scheme.

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